Aetna, Kelsey-Seybold ending contract

50,000 Houston-area patients may lose their doctors

As many as 50,000 Houston-area patients may have to find new doctors as a result of a coming split between Kelsey-Seybold Clinic and Aetna health insurance.

Kelsey-Seybold's participation in Aetna's provider network will end on April 21, the system of clinics is informing patients. The change follows months of failed talks over reimbursement rates that culminated in October in Aetna issuing notice it was terminating its contract with Kelsey-Seybold in 180 days.

"This is a disappointing outcome, and we're concerned about the effect," said Dr. Spencer Berthelsen, managing director of Kelsey-Seybold, whose more than 370 doctors treat about 500,000 patients a year at 20 clinic locations. "We know physician-patient relationships are at stake."

To soften the blow from April through the end of the year, Berthelsen said, Kelsey-Seybold will offer Aetna patients a 30 percent discount on all out-of-network services.

Ralph Holmes, president of Aetna Texas, said the company simply couldn't agree to Kelsey-Seybold's "demand for a double-digit percent increase" in reimbursement rates - a hike he said Aetna would have had to pass on to plan enrollees.

Fears 'excessive' rates'

"At the end of the day, all we're trying to do is keep health care affordable," said Holmes. "We believe access is important - we know some of our members have been accessing Kelsey-Seybold for a long time - but we must balance that against rate demands we think are excessive."

Holmes said contractual demands preclude both parties from being specific about the rates.

This isn't the first time reimbursement rates have caused problems in the nearly quarter-century-old relationship between Kelsey-Seybold and Aetna. Kelsey-Seybold in 2003 informed Aetna patients that its clinics would no longer participate in Aetna's provider network, but the rift was patched up before the scheduled termination.

Berthelsen said there's no chance that will happen this time because the notification time frame, longer than in 2003, gives patients enough time to find another insurer and because Kelsey-Seybold has undertaken "irrevocable steps" to move on to a new model of care without Aetna.

Holmes said Aetna is open to negotiating but will not agree to a double-digit rate increase.

With 2.4 million members overall in Texas, Aetna is the state's third-largest health insurer. Its roughly 50,000 patients who see Kelsey-Seybold doctors represent 10 percent of the clinic's patients.

Excluding Kelsey-Seybold, Aetna would have about 2,000 primary-care physicians and more than 10,000 specialists in the Houston area, according to officials.

Big investments

Berthelsen said the increased rates are a result of big investments in electronic medical records and a new system of coordinated care. These measures ultimately will produce savings by eliminating duplication, but they put a greater burden on doctors, he said.

This approach clashes with "Aetna's model of cost containment through discounting of payment levels," he said.

Holmes said Kelsey-Seybold's purported savings "don't materialize in Aetna's book of business." He said Aetna ended the overall contract after Kelsey-Seybold terminated two particular Aetna plans, a move he said would "put patients in the middle and result in complaints being directed at Aetna."

Holmes said Aetna already pays Kelsey-Seybold doctors more than others in its network.